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Gold Prices Reverse Gains Ahead of U.S. Presidential Election

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Gold prices turned lower on Tuesday, as investors largely waited on the sidelines ahead of the results of a contentious U.S. presidential election.

Gold for December delivery declined 0.3% at $1,275.90 a troy ounce on the Comex division of the New York Mercantile Exchange.

The slide follow a selloff on Monday after the FBI said it would not charge Democratic nominee Hillary Clinton following new evidence in the investigation into her use of a private email server. The lack of charges were seen as improving Mrs. Clinton's shot atthe White House.

"I think it's going to be very, very quiet," on Tuesday ahead of the results, said Carsten Menke, a commodities research analyst at Julius Baer. "We just need to wait."

Investors were largely expecting a victory for Mrs. Clinton, and noted that a market shock -- similar to the gains the day after the U.K. voted to leave the European Union -- was expected if Republican nominee Donald Trump takes the White House.

"Right now, the market isn't really pricing in a Trump victory," said Nitesh Shah, commodities strategist at ETF Securities in London. If Mr. Trump does win, "it could be something akin to what we saw with Brexit."

In the day following the British vote to leave the EU, gold prices rallied more than 6% as investors bought up so-called safe haven assets, including the dollar and the yen.

But if Mrs. Clinton wins the election, "life continues on pretty much as normal," said David Govett, head of precious metals at brokerage Marex Spectron in London. Mr. Govett forecast that if Mrs. Clinton wins, gold could fall about $30 to the $1,250 per troy ounce area.

Meanwhile, a Trump victory could spur price gains of at least $100 per troy ounce, he said. Some analysts have forecast that gold prices could jump as high as $1,500 if Mr. Trump wins the election.

Either way, trading is likely to be "very volatile, very thin, very nervous" over the course of the night, said Mr. Govett.

For Mr. Govett and other analysts, the expectations brings back memories of "Brexit night" in late June, when the market "jumped around like a scalded cat" as the results of the vote came in.

That shocked many investors and sent others scrambling to make it into their offices in the early morning of June 24. That won't be happening again, he said, noting he would be staying in the office overnight.

"Tonight, I think purely because of Brexit, people are going to be staying up all night in case Trump wins," said Mr. Govett.

Write to Stephanie Yang at stephanie.yang@wsj.com and Katherine Dunn at Katherine.Dunn@wsj.com